Tether Limited is the company behind Tether tokens (USDT), which leverages Blockchain technology to allow people to send, store, and receive digital tokens pegged to the Dollar, Euro, and Yen. The company provides a simple interface for businesses and individuals to convert fiat currencies into Tether coins.
Tether tokens are valued at 1-to-1 ratio against the US dollar. If you deposit $20 into your account, you will get 20 Tethers. The conversion allows users to enjoy the benefits of digital Blockchain-based transactions.
Unlike other cryptocurrencies, Tether tokens are backed by the company's reserves of fiat currency. The cryptocurrency was designed to integrate fiat currencies with the Blockchain by essentially converting physical cash into digital cash. Bitcoin and other cryptocurrencies, on the other hand, were developed to serve as alternatives to traditional currencies.
History of Tether
Tether project was founded in November 2015. Currently, there are two tokens associated with the cryptocurrency: USDT and EURT. The two tokens were made as analogs of USD and EUR for the Blockchain world. Tether has embarked on a plan to support more fiat currencies on the network.
Tether’s market cap has grown rapidly as it continues to facilitate the conversion of Euro and USD to digital tokens. The cryptocurrency has a market cap of more than $320 million.
How does Tether Work?
Tether was created with the aim of facilitating the conversion of various local currencies to provide people with digital forms of currencies. Tethers exist on a Blockchain through the Omni Protocol, which is an open source software that links Blockchains to allow the issuance and redemption of cryptocurrency tokens.
Backed by 15 fiat currencies, Tether platform allows businesses and individuals to use them on Blockchains. The platform is fully reserved, which means that the sum of all Tethers is greater or equal to the balance of the fiat currency held in the company's reserve.
From time to time, Tether Limited publishes the balance of its bank account to prove the amount of USDT in the bank account. The amount of USDT must always correspond to the amount of USD in the bank account. Because Tethers are fully anchored to real-world currencies, they can protect investors from cryptocurrency volatility.
Tether is currently under development, which means its usage is limited. Once fully developed, it will be usable in all areas where digital currencies are currently being used. Some of the areas that Tether Limited is targeting include digital exchanges whereby, Tether will be used as an alternative method for depositing and withdrawing assets form digital exchanges.
With the help of Tether, companies should be able to handle digital transactions while pricing goods and services based on familiar fiat value. Tether will also be used to move funds quickly and easily across different wallets and exchanges.
It is not possible to mine Tether as one can with other cryptocurrencies such as Bitcoin. To own a Tether token, one needs to buy it from an online exchange.
The number of Tether coins in circulation is fast approaching 1 billion tokens as more are being released. An increase in circulation of Tether should result in a further increase in their usage as a replacement for USD and other fiat currencies, which should result in an increase in their value.